Caution needed on lamb prices outlook

Already there are warning signs of "headwinds" facing the industry with numbers rising and prices becoming erratic at some centres.

Thomas Elder market analyst Matt Dalgleish, said there were headwinds for lamb markets in coming weeks as numbers in the south start to surge.

The eastern trade lamb indicator for lambs 18 to 22kg, was 795 cents a kilogram on Monday, about 35c/kg above the same time last year after peaking at around 820c/kg before slipping then rising again.

He warned challenges like the impact of COVID on global economies and a high Australian dollar, as the spring flush came forward would likely see prices slip back to the "low 700c" in the next couple of weeks.

Lamb numbers were the greatest driver and there was 100c/kg worth of price pressure from the current levels.

It would not reach the lows of the winter slump, he said, when prices fell to 638c/kg.

At Ballarat on Tuesday, the yarding varied from top first drafts of lambs to average quality.

Nutrien Livestock auctioneer Xavier Shanahan, Ballarat, said prices were $5 to $10 lower than the week prior but the quality of the yarding was variable.

He said while there were some "handy" store and trade lambs but not outstanding, the price drift was "softening" with all buyers contributing.

"We've had a couple of good weeks," he said.

At Bendigo on Monday, the market experienced some good fresh young lambs which had start to come in from southern supply areas like Kilmore, while most stock from northern areas were showing signs of having slipped.

MLA reported lamb prices overall were $2 to $5 a head easier, but with some"strong spots".

At Naracoorte, SA, Tuesday lamb numbers jump by 8600 to 26,138, with trade lambs slipping $8-$12, to av 720-750c/kg.